Polycrystalline silicon (Si), or polysilicon, refers to the raw material use in the production of single crystal wafers--the substrate for silicon-based solar cells and semiconductors. The raw material has a dark gray color, with a bronze to bluish metallic sheen. Meeting the demands of end-users for solar power systems begin with the manufacturing of high qualitypolycrystalline silicon, in short polysilicon.

Silicon-based solar panels make up 90 percent of the photovoltaic market. Thin-film technologies, which consist mainly of cadmium tellurium (CdTe) and copper indium gallium selenium (CIS/CIGS), cover the other ten percent. The thin film panel manufacturing process requires about 1/100th of the charging material needed for silicon-based modules. However, these panels have a lower efficient than standard solar modules.

Polycrystalline Manufacturers
In 2000, the photovoltaic (PV) industry accounted for ten percent of the market for polysilicon. Semiconductor companies accounted for the other 90 percent of the market. These chip companies produced the semiconductor chips required to power calculators, cellular phones, wristwatches, stereos, and other electronic gadgets.

Before the solar industry set off on its historic path of growth over the last decade, silicon manufacturers were slow to ramp up production capacity. About the same time, Germany's feed-in-tariff policy (FIT),Erneuerbare-Energien-Gesetz (EEG)--German for the “Renewable Energy Sources Act,” started to gather momentum.

By late 2004, as the number of solar module manufacturers increased, solar cell manufacturers began competing with the semiconductor industry for the limited supply of polysilicon feedstock more aggressively.

National Renewable Energy Laboratory (NREL) statistics show the PV industry surpassing the semiconductor sector as the largest consumer of polysilicon feedstock, in 2008. From 2007 to 2008, solar cell manufacturers' purchase of polysilicon increased from 17,000, to 44,000 metric tons, which resulted in significant supply shortages. In 2003, silicon feedstock had a spot price of $24 per kilogram (kg). Explosive demand pushed spot prices to $200 kg by 2007. At its peak in 2008, the spot price for polysilicon skyrocketed to $500 per kg.

Manufacturers scrambled to secure product—most market participants entered long-term supply agreements with durations of 6 to 10 years. Polysilicon manufacturers required buyers to pay in advance. Firms that lack sufficient capital to secure a stable supply of polysilicon pre-paid the contract by selling equity in their companies.

For example, MEMC Electronic Materials, which received warrants from Suntech Power Holdings Co Ltd of China, which entitle MEMC to buy the company's stock at a pre-determined price up to a specified date. According to documents filed with the Securities and Exchange Commission. LDK reported it entered “substantial long-term contractual commitments to purchase polysilicon from various suppliers.” According to they invested over $170 million to secure feedstock

Historic high prices motivated many new companies to enter the polysilicon manufacturing segment, especially in the United States-where state and federal subsidies for the solar industry began to take shape. Companies in Europe, China, Russia, and Qatar have also entered the industry.

Some companies, already involved in the solar industry, simply vertically integrated their operations into the polysilicon manufacturing segment. Case in point, LDK constructed a production plant near its solar wafer manufacturing facilities in Xinyu Hi-Tech Industrial Park. The two factories - 1000 and 15,000 metric ton capacity came online in 2009. Polysilicon manufacturing plants entail a time-consuming construction process, which may cost $1-1.5 billion to complete.

However, the financial collapse of 2008 led to a crash in polysilicon prices, led to most of these enterprises going under, in 2009, as the drop in demand sent polysilicon prices plummeting below their marginal costs.

In 2009, China increased its polysilicon production output threefold, over 2008 levels, to 18,000 tons. Overall, the strong growth in polysilicon production and shows no signs of subsiding. Production reached 209, 000 tons in 2010 and may approach 350,000 tons by 2012.

Actual/Planned Production Capacity of Eight Largest Polysilicon Manufacturers

Silica – The Starting Raw Material

Silica rates second, behind oxygen, as the most abundant material on Earth. Nearly 26 percent of the Earth's crust consists of siliceous minerals, such as Chalcedony, Chert, Opal, Agate and Quartz, contain the element silicon, or a pure silica dioxide.

The starting point for hyperpure silicon begins with quartzite, a fine to median grain rock and a much sought after raw material for silicon. Quartzite has a whitish gray color and consists mostly of re-crystallized silica dioxide grains. It contains 90 to 99 percent quartz-- the highest concentration of pure silica on the planet.

Even so, the path from quartzite to hyperpure polycrystalline silicon involves an extensive, week- long process. To meet the stringent specifications required by the PV industry, the silicon undergoes a series of steps to process and refine the material into solar-grade silicon.

Refining Quartz to Trichlorosilane

Refinement begins in an electric arc furnace, which operates at a temperature of 1,800 to 2,000° Centigrade(C). The process uses COKE to reduce the quartzite to metallurgical-grade silicon (MG-Si). Although three different technologies exist for manufacturing polysilicon, most manufacturers employ the oldest process known as the Siemens method.

Hydrochlorination involves a closed-loop process, which means it recovers and recycles silicontetrachloride (STC) -- a by-product from the polysilicon deposition process.

TCS Purification

The TCS undergoes an extensive distillation process, which requires four-steps to purify the material:

· Take out impurities, metal chlorides, and higher order chlorosilanes

· Separate and gather STC for conversion to TCS

· Remove hydrocarbons and light-boiling compounds

· Eliminate carbon chlorosilanes compounds

Hydrogen reduces the now high pure trichlorosilane, at around 1100° C, to make silicon again. Before the next step, the TCS is stored in towers to undergo a quality analysis to determine its approval for use.

On approval, the TCS flows through a pipeline to a Chemical Vapor Deposition (CVD) reactor building to form silicon -again. The next step in the process deposits the hyperpure silicon on electrically heated highly pure silicon rods. The elemental silicone grows on the rods uniformly in polycrystalline form.

Polycrystalline Silicon Production Plant, Photo Credit: REC

This step forms rods of a specified diameter--around 130 millimeters. The rods—grown in batches, must then cool and transport to a clean area for further handling. This manufacturing process consumes huge amounts of energy. Some industry estimates put silicon production at 85 percent of the entire energy consumption required for manufacturing solar panels.

Although the PV market does not have as a stringent a requirement for purity as semiconductors, the PV industry does not tolerate impurities in excess of one parts per million (PPM) -- PV grade polysilicon ranges from 0.1 to 0.01 PPM-- a purity of 99.99999 to 99.999999 percent.The industry has a purity standard of 99.999999 or “six nines”

Polycrystalline silicon requires purity of only one foreign atom per 10 billion silicon atoms-- the equivalent of placing a penny on the area the size of 100 American-style football fields. In fact, many solar cell manufacturers have move to accepting only polysilicon of the highest purity, especially monocrystalline solar cell manufacturers.

Worker Checking Polysilicon Ingot Specifications, Photo Credit: REC

The Current Slump in Polysilicon Prices

Since March 2011, polysilicon spot prices have plummeted 48 percent, due mainly to the glut of solar modules in an environment of decrease demand. Many companies, integrated into the polysilicon, wafer and solar cells segments, have exerted downward pressure on PV components prices in an attempt to stabilize falling profit margins. In mid-October 2011, EnergyTrend analysts report the price of polysilicon a 5.9 percent decline, pushing polysilicon below $40/kg.

Christine Yang, Chairman of the Taiwan Polysilicon Corporation, called for manufacturers to put plans for building additional capacity on hold, and place more emphasis on “technology and achieving economies of scale.”